By Michael Aneiro

At this rate the bond market could just spend all day today looking at the Institute for Supply Management and waiting to see whether or not it revises its May manufacturing index any further. So far today the ISM this morning reported a weaker-than-expected May manufacturing index reading, only to revise that figure higher later this morning after apparently realizing an error in the seasonal adjustments made to the data.

Now the ISM has just issued a second revision, saying the first number (53.2) was too low but the second number (56.0) was too high, with the third revision coming in at 55.4. The final(?) 55.4 figure marks an improvement from April’s 54.9 figure but it just misses economists’ expectations of 55.5, while the prior (now discredited) revision would have beaten expectations. A number above 50 indicates expansion in the manufacturing sector. So in a nutshell manufacturing activity improved in May compared to April, but the May activity still fell just short of economists’ expectations.

All of this matters because the bond market has become hyper-sensitive to incoming economic data as it awaits any sign that strong second-quarter growth could finally push Treasury bond yields higher, and the ISM figure marks the first real reading on full-month economic activity in May. After improbably falling throughout 2014 so far and throughout May, Treasury yields have been heading higher today, and have plateaued since the ISM’s second revision, with the 10-year note down 22/32 in price to lift its yield to 2.536%, per Tradeweb data. The 30-year bond is down 1 8/32 in price to yield 3.382%.